Thursday, October 18, 2012

Are Komen and Livestrong Leading Cancer Charities Into Oblivion?

by Gary Snyder

It’s National Breast Cancer
Awareness Month. Let us stretch it a bit to include a look at both Susan G.
Komen and Livestrong. Both are making a lot of noise. I was struck by the
remarkable similarities surrounding these two very popular charities

Both Lance Armstrong and
Nancy Brinker, Susan G. Komen’s sister, are founders of their respective
charities. Both agencies focus on cancer. Both Brinker and Armstrong have
suffered from cancer. Both have spent years building a brand that is recognized
around the globe. Accordingly, donors and corporate sponsors coveted both of
them.

Both leaders have embroiled
their agencies in controversy and, as a result, are under unwanted and intense
scrutiny.

Susan G. Komen for the Cure
is currently the nation’s leading anti-breast cancer charity. It has generated
about $360 million in revenue annually. Under the direction of Nancy Brinker, a
controversy began when it pulled the plug on funding Planned Parenthood grants
for screening and mammogram referrals. That single misstep led to the unveiling
of many questionable practices over several decades.

Livestrong is the largest
athlete-named charity in the world. It has revenues approximating $42 million.
Its founder’s, Lance Armstrong, credibility plummeted when the U.S. Anti-Doping
Agency revealed evidence that the cyclist had used performance-enhancing drugs
and stripped him of his seven Tour de France titles. He refused to fight the
charges, but has denied using such drugs. The inquiry put his charity under the
focus of many. Faced with mounting inquiries, Armstrong stepped down as
chairman of Livestrong.

As if on queue, both agencies
suggested, at the outset of their controversies, fundraising was not hurt. They
said that it was enhanced. Brinker proclaimed that on national television. Armstrong’s
Livestrong told ESPN that its revenues were up 5.4 percent. After looking into
the details, both declarations may be a stretch.

If insider observations are any indication, turnout
at Susan G. Komen pink-ribbon fundraising events are substantially down, some
by as much as 40%. Some weighty donors have taken flight. From anecdotal
observations, corporate sponsorship is significantly depressed.

Komen had a precipitate fall from a number two
ranking in a 2011 survey to a number 56 ranking in 2012 between Jan. 31 and
Feb. 20, 2012. “Since it was first surveyed in EquiTrend, Susan G. Komen for
the Cure has in many ways represented the 'gold standard' among non-profits
measured in our study, consistently reporting high scores for quality, the
willingness to recommend and, most importantly, trust. Komen finds itself near
the bottom of the pack on all of these items.” Some have suggested that the
reason for Komen’s poor performance is, in part, because its lack of commitment
to finding a cure. Many fellow breast-cancer organizations
feel that the Komen self-adoration has overtaken any interest in cure research with its research funding being cut in half in the past couple
of years.

According
to tax records the Livestrong foundation saw contributions and grants drop by
23% ($41 million in 2009 to $30 million in 2010) as the doping controversy
started to unfold. Its revenues have bounced
back a bit. Observers, however, are saying that Livestrong, the charity
inextricably linked with the Armstrong and built on the doping fraud, will see an
adverse effect on raising funds. In addition, another proxy measure of commitment to
the Livestrong cause---riders at events--- has diminished substantially.

While
neither Nancy Brinker nor Lance Armstrong has suffered financially personally
yet, both have become lightning rods that may inhibit the growth and even the survival
of their respective charities. Nancy Brinker receives over $430,000 annually
from Komen (for various positions) which seems to be a good reason to ignore
incessant cries for her to step down. She has a booking agent for celebrity appearances, speaking engagements,
endorsements and autograph signings in which she receives upwards of $45,000 or
more in fees to show up.

Armstrong
is worth over $100 million and commands $50,000 for speaking engagements. But his
sound financial station may be changing. Nike, Giro Helmets, Trek
Bicycles,FRSenergy drink company,Anheuser-Busch and Radio Shack ended their contracts
with Lance Armstrong.Their endorsement
deals once earned the embattled cycling star millions of dollars. In addition, another hurtle
for Armstrong to overcome may be the London's
Sunday Times. The newspaper is considering legal action against the cyclist to
recover the money spent on a libel suit brought by Armstrong, which he won. One
senior source at the newspaper said that the case cost it about $1 million.

Both
founders have been embroiled in questionable dealings. A tempest started when
the Armstrong received shares of stock in an initial public offering that
Livestrong was a part. When the media criticized it, Armstrong donated the
proceeds---roughly $1.2 million---to the foundation.

Nancy Brinker has had a list
of conflicts-of-interest. Over vehement objections by other breast cancer
groups, Komen (Brinker) endorsed a cancer treatment with troubling links to
uterine cancer. Its maker had been a long supporter of Komen. She caused
controversy by sitting on the board of a for-profit chain (with her $500,000
investment) of cancer treatment centers. She had Susan G. Komen invest over
$150,000 in her husband’s company. She
used Komen stock portfolio coupled with her cozy political relationships to her
own advantage while omitting such in the Susan G. Komen for the Cure
literature, Web site and public statements.

Another
storm has spilled over both agencies is the large amount of donor dollars spent
by both organizations to protect their trademarks. In 2009, Livestrong spent over a million dollars.
Meanwhile, Susan G. Komen for the Cure has identified and filed legal trademark
oppositions against more than a hundred charities that used any variation of
“for the cure”. In the past, this effort had cost SGK almost a million dollars
a year in donor funds. In some instances Komen demanded that agencies never use
the color pink in conjunction with their fundraising. Some of the smaller
targeted agencies have raised funds for Komen competitors such as the National
Breast Cancer Foundation.

There are significant
contrasts in the governance of the respective agencies. To date, records show
that Lance Armstrong has been seemingly scrupulous in his dealings with
Livestrong. Nancy Brinker has not.

The board at Komen has been a
repository for Brinker’s friends, family and business associates. Faced with
outrage, board members have left en masse. Nevertheless, Brinker continues to
fortify her position by adding many beholden to her such as vendors or
employees. At times, she has been both a board member and a staff member. As a
staff member she recommends to a board that she totally controls. This is an
arrangement that no well-informed board member should accept.

In addition to the conflicts-of-interest
that we have seen, internal conflicts proliferate at Susan G. Komen for the
Cure. Brinker has had her fingerprints on every decision at the agency. There
has been virtually a total turnover in the administration of the organization
with over $1 million paid as a result of personnel transitioning out of the
agency. In the past, there were charges that Brinker used agency funds to
defray personal expenses that she has incurred while employed elsewhere. This is a thorn that she has declined to
address but continues to surface as outsiders monitor the operations of the
organization.

Controversies abound elsewhere
in the cancer charity world with a denigration of the cancer charity brand.
Beside the two aforementioned cancer charities numerous other cancer charity
efforts have put a blemish on their hard-won trust.

First, contributions are not
going to where the donor has intended. A
probe into the NFL Breast Cancer Awareness fundraising showed that only 5% of
each sale goes to the American Cancer Society. Donor contributions have morphed
into public relations awareness huge campaigns to promote an agency and the
cause, but not a cure.

Second, dubious practices, if
continued, will destroy good charity efforts. Numerous cancer charities have
abused their trusted names for the good of a few. For example, the Coalition Against Breast Cancer offers virtually
nothing to patients after taking in millions. The Coalition is under
investigation by New York Attorney General Eric Schneiderman. He called the
charity a sham.

The United Cancer Council hired a fundraiser netting
only $2 million out of the $28 million collected. The Making Memories Breast Cancer Foundation raised $1,159,654.
Just under 12 percent, less than $137,000, went toward granting wishes for
terminally ill breast cancer patients.

Both the Better Business Bureau and the nonprofit
rating agency Charity Navigator has vilify Cancer Fund of America for giving
less than a penny of every dollar raised to cancer patients.

Breast Cancer Society
(BCS) claims it raised $50 million in contributions in tax filings but when
pressed by Marie Claire magazine the founder said that it raised just $15
million in cash donations in 2009. The other $35 million represented mere
estimates of medications that the BCS accepted as gifts or bought at a major
discount. The Ontario-based Universal Aide Society revoked its Canadian
charitable status for malfeasance.

Charity Navigator ranks
The Breast Cancer Relief Foundation and the John Wayne Cancer Institute with
just one star, poorly performing organizations. United Breast Cancer
Foundation, Walker Cancer Research Institute and the American Breast Cancer
Foundation have zero (0) stars.

It has been estimated
that tens of millions of dollars are taken from those to which it was intended.
Fewer than 50% of the Charity Navigator breast cancer charities have
rated high for their commitment to Accountability and Transparency.

Evidence clearly indicates that both large and small
cancer charity organizations are performing poorly. Unless there is an outside
intervention, a fall from grace is imminent.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

About Me

Gary Snyder is the author, most recently, of the groundbreaking expose on the charitable sector, Silence: The Impending Threat to the Charitable Sector as well as the often-cited guide on best practices and key concepts, Nonprofits: On
the Brink.

He is the publisher of a
twice-monthly newsletter, Nonprofit Imperative that gives an update on the current status of the
charitable sector.

Snyder is often quoted and frequent contributor to the blog of the National
Committee for Responsive Philanthropy. Snyder twiceauthored the Governance Chapter of the Michigan
Nonprofit Management Manual (4th and 5th editions).

He is a speaker on ethics,
financial and governance matters of the sector. For almost a decade, Snyder is frequently
consulted by Congress and has been quoted in print, broadcast and online media
outlets.